U.S. markets surge after Congress approves ‘cliff’ deal

The negative reaction threatened to plunge Washington back into the high-stakes, last-minute drama that has characterized both the fiscal-cliff negotiations and a series of other recent confrontations between the two parties over spending and taxes, including the fight over raising the federal borrowing limit in the summer of 2011.

Senate Democrats and administration officials warned that the Senate would reject any move to amend the measure. The House would be responsible for a dive over the cliff hours before U.S. financial markets were set to open Wednesday after the New Year’s holiday.

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The impact of tax increases on taxpayers.

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For hours, there was no decision on how to proceed. As leaders huddled, rank-and-file members returned to their offices and were greeted with confusing messages from conservatives and constituents.

Former House speaker Newt Gingrich (R-Ga.), who has opposed any deal to raise taxes, voiced support for Cantor. But conservative writer William Kristol, wrote a blog post titled “Say Yes to the Mess.”

“Politically, Republicans are escaping with a better outcome than they might have expected, and President Obama has gotten relatively little at his moment of greatest strength,” Kristol said, advising House Republicans to take the deal.

Shortly before dinner, Republicans gathered behind closed doors again to settle on a new plan: Leaders would survey members about the spending-cut package to determine if it could pass. If not, they would allow the Senate bill to move ahead.

Around 8 p.m., they announced a decision. The Senate bill would receive a vote, with the expectation that Democrats and Republicans would join forces to approve the measure.

During floor debate, Camp, chairman of the tax-writing Ways and Means Committee, said GOP members should support the bill because it would make “permanent tax policies Republicans originally crafted” under President George W. Bush.

Rep. Sander M. Levin (Mich.), the ranking Democrat on the Ways and Means Committee, countered that Democrats should back the bill because it would let the Bush tax cuts expire for the wealthy, breaking the “iron barrier” to tax increases since 1993.

Paul Kane and Ed O’Keefe contributed to this report.